Starting a business requires spending money to get up and running, but how much you spend depends on different factors. That is, the needs of your business dictate how much you ultimately spend. A cost checklist is thus much needed for starting up any business.
According to the Small Business Administration (SBA), you’ll need anywhere from $2,000 to 5,000, but it’s possible to put out less money than that and still get your operation running.
There are a number of reasons why you need to create a list of costs that are going to be incurred before you can officially say you’re open for business. In the event you’re looking for a loan, you can show a potential lender that you have a grasp on where the money needs to go.
This also shows the lender that you have a plan of action to earn money to repay the loan. The list also helps you figure out your break-even point, or the amount you need to recover and repay yourself, a lender, or the business once everything is in motion.
Planning out your startup also helps you identify what you’re going to need to operate your business. It also helps you figure out how much to set aside to pay for everything that’s needed for a smooth launch of your startup.
The following is a complete cost checklist to help you estimate how much each aspect of starting a business is going to cost.
Cost of Registering Different Types of Business Entities
Filing a C or S corporation with the Department of State costs $125, but an LLC is more expensive. Also, there is a significant difference in LLC formation costs between the states.
It costs only $75 to form an LLC in California, for example, but $205 to form an LLC in New York state, and you have to publish a notice in two different newspapers in order to fulfill the filing requirements there.
This adds another cost to forming an LLC, and the actual cost varies depending on the location of your registered agent. That is, you have to publish your notice in the county where your registered agent is located. For example, Albany is one of the least expensive counties, and New York County (Manhattan) is among the most expensive.
After you’ve satisfied the publication requirement, the newspaper gives you an affidavit of notification, which needs to be submitted to the Department of State with a $50 filing fee for regular speed and $75 for expedited.
Retaining someone or a service to handle the administrative aspects of starting a business is a cost that’s worth paying.
Letting an expert do the work on your behalf gives you the freedom to focus on putting your new business together and provides you with the assurance that the administrative paperwork is error-free, correct, and done in a timely manner.
